The debate surrounding whether Bangladesh should postpone its graduation from the UN’s Least Developed Country (LDC) classification and the challenges that may arise during the transition have been ongoing for some time. At a recent roundtable discussion hosted by The Daily Star, business leaders, particularly those from export-focused industries, proposed delaying the graduation from 2026 to 2032. Their concerns are valid, considering recent economic shocks affecting the country’s growth and operations.
One of the primary reasons cited for advocating the postponement is the lack of readiness to manage the potential loss of trade preferences post-graduation. Among all LDCs, Bangladesh, heavily reliant on exports, benefits the most from preferential access to global markets. It is the sole LDC extensively utilizing the TRIPS waiver in its pharmaceutical sector, facing significant challenges in drug production and pricing once the waiver expires after graduation. Bangladesh lacks sufficient strategies to handle the aftermath of graduation, lagging behind key competitors like Vietnam and India, who have secured free trade agreements with major markets. Despite aspiring to transition to a developing country since 2018, Bangladesh has not actively pursued bilateral agreements with key trading partners. The country also grapples with high logistical expenses, governance issues, bureaucratic hurdles, elevated business costs, and inadequate infrastructure. Moreover, compliance expenses related to labor standards, environmental conservation, and intellectual property rights are anticipated to rise.
Nevertheless, some experts argue in favor of adhering to the UN’s scheduled graduation. A white paper on the economy released in December 2024 suggests that there are no compelling grounds for postponement. The current planning adviser indicated that deferral might not be feasible, despite precedents of such actions. Bangladesh cannot unilaterally decide on this matter; it must engage in negotiations with the UN and the two other countries—Nepal and Laos—slated for graduation in 2026 to secure a postponement, substantiating the necessity for a smooth transition.
Given this context, it is crucial for the interim government to pause and evaluate all options. A national dialogue involving all stakeholders is essential to explore varied perspectives. The concerns raised by business leaders should be carefully examined, and a practical approach must be adopted to address the impending situation promptly, considering the limited timeframe. Concurrently, addressing the aforementioned challenges swiftly is imperative to enhance Bangladesh’s competitiveness in the global trade arena. Whatever decision is reached should prioritize the country’s and its populace’s best interests.